Sunday, January 6, 2013

Banks
go "all in" betting on success of loan modifications - (www.ochousingnews.com) Lenders in California are placing their faith in the success of loan
modifications. Of course, to them success can mean something different than
what it means to a loanowner. Success to a lender can be defined as obtaining a
few more payments prior to a short sale or foreclosure. With prices rising,
lenders benefit two ways from loan modifications. First, they get cashflow from
non-performing loans. They know this is likely temporary as about 50% of loan
modifications fail each year, but some cashflow is better than none. Plus,
since prices are rising, when they do finally approve a short sale or foreclose
on the property, they will recover more of their original capital than if they
were to foreclose today. Lenders are kicking the can and playing the amend-extend-pretend
music. Lenders are determined not to clear the market. Due to their double
incentive to wait that I described above, they will continue to modify loans
over and over again until either they have the capital reserves to absorb the
write down or until prices reach the loan balances when they can foreclose and
get all their money back.

Greeks Can’t Find Euros to Buy Heating Oil With Winter Economy
- (www.bloomberg.com) In the Greek mountain town of Kastoria, less than an hour from the
Albanian border, Kostas Tsitskos, 88, can’t afford fuel to heat his home
against the winter’s cold. So he and his son live in a single bedroom, warmed
by a small electric heater. “One room is
enough,” said Tsitskos, who lives on a 734 euro-a-month ($971) pension and
doesn’t have the 1,000 euros a month he needs to buy heating oil. Greece is facing a heating-oil crisis. With an economy
that has contracted for five years and an unemployment rate at a record 25 percent,
residents in northern Greece can’t heat their homes. Kastoria hasn’t received
funds from the central government to warm schools and the mayor said he will
close all 53 of them rather than let children freeze, a step already taken in a
nearby town. Truckloads of wood are arriving from Bulgaria as families search
for alternative fuels.

HOAs
Hate Renters - (www.multifamilybiz.com)
What do Homeowners Associations have against renters? That is the
question being asked by renting lifestyle advocate Bill Deegan, the CEO of Renter Nation, the country’s only nationwide
group “by, for and about residential renters.” Citing a troubling trend taking
place in the United States by HOAs and local governments to limit the number of
renters in single-family home developments, Mr. Deegan called these
restrictions “misguided, discriminatory and based on societal and cultural
stereotypes.” As recently reported by USA
Today, HOAs and many municipalities across the country are basing
these restrictions on the false premise that renters “bring down property
values.” As Mr. Deegan asserts and as supported by respected university
studies including those conducted by the University of
Pennsylvania’s Wharton School, there is no empirical evidence to suggest that
the presence of renters in a community cause property values to decline.

UBS Libor Fine Soars as Traders Bribed Brokers to Fix Libor
Rate - (www.bloomberg.com) The U.S.
government said the two men were part of a conspiracy to commit wire fraud from September 2006 to 2009.
Hayes, 33, served as a senior yen swaps trader at UBS in Tokyo, while Darin, 41, worked as a short-term interest rates
trader at UBS in Singapore, Tokyo and
Zurich, the U.S. said. Prosecutors allege that Hayes and Darin “conspired with
others known and unknown within UBS to cause the bank to make false and
misleading yen Libor submissions to the British Bankers’ Association.” Darin
didn’t respond immediately to a voice-mail message, and Hayes couldn’t
immediately be reached. U.K. fraud prosecutors opened a criminal probe this
year and last week arrestedHayes, according to people familiar with the matter.

FHA to Tighten Mortgage Programs - (online.wsj.com) The Federal Housing Administration said it will tighten mortgage
standards for certain homeowners and limit the amount of money that can be
borrowed through its popular reverse-mortgage program as the agency faces
ballooning losses. Carol Galante, the FHA's acting commissioner, in a letter
Tuesday to Sen. Bob Corker (R., Tenn.) said
the changes would be implemented by Jan. 31. The changes include suspending the
FHA's most popular reverse-mortgage option that allows Americans 62 or older to
take cash out of their homes in a large, upfront payment. The agency will instead
promote a smaller product called the Home Equity Conversion Mortgage Saver,
which allows seniors to take less cash out of their homes.